Why Turkish property is still an attractive prospect for Gulf investors

Thursday 8th September 2016

Written by Roy Weatherby, The Overseas Investor

Regardless of the security problems in Turkey, it seems as though Gulf investors are keen to take advantage of the potential the country has to offer when it comes to property.

Currently, Gulf investors make up more than 50% of the sales in Turkey and this is likely to cause an increase in demand in the short term.

A new development in Istanbul that consists of homes, shops and offices has been boosted by Kuwaiti real estate company increasing their stake to 90%. Regardless of the political unrest, they believe that the Turkish market is strong enough to promote itself to investors from the Gulf countries. Therefore, investors are willing to accept the risk more than those investors from Europe.

The number of UK investors purchasing property in Turkey has dropped by 16% but Gulf investors are used to change and this means that they are not likely to be put off by events seen in Turkey. The economy in Turkey, as well as it being the middle man between East and West along with its Islamic population makes it a very attractive investment opportunity for Gulf investors.

Up to the end of March 2016, the property market in Istanbul was one of the fastest growing markets in the world with prices increasing by an average of 19.6%. Izmir, the third largest city in Turkey also saw house prices rise by 16.75 making it the ninth fastest growing market in the world.

One of the important factors in the growth of the economy in Turkey is residential construction and the government are well aware of this as they have reduced interest rates to help stabilise sales.

Once again, the coup attempt and bombings in Istanbul and Ankara are likely to have little effect on Turkish house prices as they are likely to rise by 10-15% over the next 12 months. As the population increases in Turkey so will the price in property and this is boosted by the cut in interest rates and the refugees fleeing from Syria.

If this increase occurs, it will follow the same pattern that has been seen over the last three years. This also happened to be a period where there was conflict and a reduction in the currency.

However, a number of Turkish companies are reducing the amount of marketing aimed at investors from overseas. This can be seen by the number of companies taking up stands at the Cityscape property exhibition in Dubai as the number has decreased considerably compared to last year.

This is mainly down to the attempted coup as well as the political unrest. Many developers have decided not to attend Cityscape and this is because they have now decided to spend more time on the principal consumer demographic as opposed to selling block or single unit to investors from the Middle East.

The number of inquiries from overseas investors has decreased but this does not detract from the fact that it presents an ideal time to purchase property.

For more information about investing in Turkish property, please contact Hopwood House.